Thoughts on A-shares, Hong Kong stocks, and US stocks
I've been in the stock market for over half a year. From the very beginning, I was told not to touch A-shares, so I've stuck to this principle and consistently bought broad-based index funds in the A-share market. Yesterday was my first day buying individual energy stocks in the A-share market, and it dropped 8% right at the open, bringing the term "Myanmar A-shares" (referring to high risk/scams) to mind. Today, it rebounded slightly at the open, and I exited with a small loss.
On the US stock side, I currently hold four stocks: $Circle(CRCL.US), which once gained 110%. I had no take-profit strategy and no concept of taking profits; it fluctuated down to a 10% loss in between, until last night when I barely broke even. $Ondas(ONDS.US) also once gained 45%, reaching near its all-time high, but again, no take-profit. It is still down more than 20% now. $Nokia Oyj(NOK.US) In June, optical storage was very hot, so I bought Nokia, carrying a bit of nostalgia from my childhood. I bought at a high point, and during the holding period, it fluctuated up and down repeatedly, resulting in a 25% loss to date. Now I reflect that I wouldn't enter such targets next time. Because it was close to the peak, and it had already multiplied several times this year. This is a typical case of chasing highs. In the future, I will select targets suitable for long-term holding; this target is in the top three in its field.
This July taught me a deep lesson. All profits were wiped out by the pullback, and I am still in a slight loss.
The main reason for the failure is that I had absolutely no concept of take-profit or stop-loss. My entry was emotional, without seriously researching the company's situation. It was like following the herd, lacking independent insight. The most memorable lesson was on July 13th when it dropped 20%; I went heavy on SK Hynix 2x leveraged ETFs. Little did I know that after entering, it continued to crash to a 33% loss. That night, anxiety kept me tossing and turning. The next day, I hoped for a rebound, but just minutes after the open at 63, it dropped another 10% to 49 HKD. This truly pierced my psychological defense. Then I saw other bros who bought the 2x leveraged products panicking and selling off. Finally, at 11:55 AM, I sold at 55, only to see a violent rally back to 63 right after the afternoon open. I really, really, really... Although I got off the bus, it might give some confidence back to those who held on. Those two days, I lived in deep anxiety, severely affecting my life. The only thing I'm glad about is that I didn't use margin financing.
The main reason I couldn't keep my cool this time was that the position size was relatively large, and the 2x leverage amplified the panic, leading me to cut losses. This trade also affected my other trades in the following days.
It has rebounded slightly these past two days. I'm waiting for the individual stocks to slowly break even and will clear them one by one. I won't be opening a "supermarket" (holding too many different stocks) anymore. I'll focus mainly on broad-based index funds.
Broad-based index funds can reduce my anxiety. With individual stocks, adding heavy positions and leverage means that even if you win many times, one loss can cost you your seat at the table. You must always review your trades promptly.
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